Putting Together Your Down Payment

Many borrowers qualify for various loan programs, but they don't have a lot of cash to pay the standard down payment. Below are a few ways to get together a down payment

Tighten your belt and save. Turn your budget upside-down to uncover extra money to go toward your down payment. Also, you can look into bank programs in which a specific portion of your paycheck is automatically deposited into a savings account every pay period. Some effective approaches to build up funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Sell things you do not need and get a part-time job. Try to find a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. You can also seriously consider the possessions you really need and the things you could be able to put up for sale. Maybe you have collectibles you can sell on an online auction, or household items for a tag or garage sale. Also, you might want to consider selling any investments you hold.

Borrow funds from a retirement plan. Investigate the parameters of your retirement program. Some homebuyers get down payment money by withdrawing funds from their IRAs or taking funds out of their 401(k) plans. You will want to ensure you know about any penalties, the way this could affect on income taxes, and repayment obligation.

Request a generous gift from your family. Many buyers are often fortunate enough to receive help with their down payment assistance from giving parents and other family members who may be anxious to help get them in their own home. Your family members may be eager to help you reach the goal of having your own home.

Research housing finance agencies. Special mortgage loans are given to buyers in specific situations, like low income homebuyers or future homeowners looking to renovating homes in a particular neighborhood, among others. With the help of a housing finance agency, you probably will receive an interest rate that is below market, down payment help and other incentives. These kinds of agencies can help eligible buyers with a lower interest rate, get you your down payment, and offer other assistance. These non-profit programs were established to promote home ownership in particular places.

Explore no-down and low-down mortgage loan programs.

• FHA loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in aiding low to moderate-income Americans get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who would not be eligible for a conventional mortgage by themselves, by offering mortgage insurance to lenders. Interest rates with an FHA loan are typically the current interest rate, but the down payment amounts with an FHA mortgage are below those of conventional loans. The required down payment can go as low as 3 percent while the closing costs could be financed in the mortgage loan.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This specialized loan requires no down payment, has mimimal closing costs, and offers a competitive rate of interest. While the VA does not actually finance the mortgage loans, it does certify eligibility to qualify for a VA mortgage.

• Piggy-back loans

  You may fund your down payment using a second mortgage that closes at the same time as the first. Most of the time, the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. Instead of the traditional 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

• Carry-Back loans

  In the option of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. You would borrow the majority of the purchase price from a traditional mortgage lending institution and borrow the remainder from the seller. Typically you will pay a somewhat higher interest rate with the loan from the seller.

No matter your method of pulling together your down payment money, the satisfaction of living in your own home will be just as sweet!

Need to talk about down payments? Call us at 8557558700.